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Political tug of war threatens Grady

By Dave Williams

dave.williams@graypub.com

ATLANTA - The local politicians running Grady Memorial Hospital say they're making a good-faith effort to save Georgia's largest public hospital from bankruptcy.

Commissioners in Fulton and DeKalb counties have put up $15 million and $5 million, respectively, in emergency funding.

And the hospital's governing board has agreed to study whether Grady's management should be turned over to a nonprofit, as recommended by a task force of business leaders.

As far as they're concerned, it's the state's turn to step up.

But Republican leaders in the General Assembly say they want to see more than one-shot infusions of cash, or a study, before they kick in state money to rescue Grady.

The impasse resulting from those conflicting expectations threatens to shut down a hospital with impact far beyond its downtown Atlanta environs.

"If Grady were to close, it would literally destroy our health-care service delivery system in metro Atlanta," said Tom Bell, co-chairman of the task force that suggested the management overhaul for Grady. "We've got to do something about it."

Grady's fiscal woes aren't new. The hospital has been losing money since 2000, as the rising cost of treating its mostly indigent patients outstrips Grady's financial support. It's the same problem faced by 45 other Georgia hospitals that treat a high percentage of poor and uninsured patients.

But Grady's symptoms are more severe, because its load of non-paying patients is even higher than the others.

In 2005, 70 percent of Grady's patients were, either uninsured or covered by Medicaid, compared to just 22 percent, on average, for the other hospitals in Georgia.

"When the other hospitals have a cold, Grady has pneumonia and is on life support," said Sen. Nan Orrock (D-Atlanta.)

The chamber task force found that in order to survive, Grady needs a one-time allocation of about $120 million, plus $50 million to $60 million each year.

Rep. Bob Holmes (D-Atlanta), chairman of the Fulton County legislative delegation, said that's far too great a burden for Fulton and DeKalb counties.

Holmes is calling for Grady to become a permanent line item in the state budget. He and others argue that the hospital is vital, not just to metro Atlanta, but to all of Georgia.

Grady has one of only two burn centers in the state and the only poison center. The hospital serves as the training ground for medical students attending Emory University and the Morehouse School of Medicine.

But instead of boosting state aid to Grady, Holmes said the state reduced the hospital's funding this year by $32 million. "They're cutting the money and then blaming them for the horrible deficit," he said.

But Republican leaders say the General Assembly will not bail out Grady until lawmakers get assurances that the hospital has gotten its financial house in order.

To aid that process, a special House committee created by Speaker Glenn Richardson (R-Hiram), has ordered an audit of Grady's finances, including a decades-old contract with Emory that has come under fire in recent weeks.

"The audit is not going to be punitive," said Rep. Ben Harbin (R-Evans), a member of the committee. "It's really to find out where this money is going and how it's being spent.

"We've got to figure out whether Grady is a unique circumstance, or if all hospitals are going to be in the same situation."

Sen. David Shafer (R-Duluth) said if and when the state does step in, it won't be just to help Grady, but other hospitals facing cash-flow problems, too.

"There's a role for the state in making sure that Grady does not close," he said. "But it's in the larger context of making sure there are safety-net hospitals across the state."

Toward that end, the state Department of Community Health's 2009 budget request would increase Medicaid reimbursements to hospitals with trauma units, including Grady.

Also, legislative leaders are vowing to fund the statewide trauma-care network the General Assembly created this year, but left with no money.

Shafer has introduced legislation that would force Grady board members to turn the hospital over to a nonprofit, if they don't do so voluntarily.

The bill's supporters say a nonprofit would create more trust in Grady's management, making it easier to raise money from the state and the philanthropic community.

"If they move in that director, there are people willing to step up and help them," said Joseph Parker, president of the Georgia Hospital Association.

Indeed, there's reason for optimism, despite the strong words that have come from both sides of the debate over Grady, said Sen. David Adelman (D-Decatur.)

Adelman, chairman of the Senate Urban Affairs Committee, which has been working on the issue, said the stakes simply are too high for the counties, the state and the private sector not to come through.

"I believe cooler heads will prevail," he said. "I don't think we're going to sacrifice Grady at the political altar."